California’s plan to cut emissions heavy on mandates

• Utilities: A third of California’s electricity must come from renewable sources such as solar and wind power. As of 2006, that figure stood at 10.9 percent.

• Energy efficiency: The state will set tougher appliance efficiency standards, green building codes, and water conservation measures.

Regulation will do most of the work in bringing the main sources of greenhouse gases within the state’s new emissions cap. The shortfall will be handled through a cap-and-trade system.

These market-based schemes force polluters to acquire credits for their level of emissions. Government sets a cap on these credits, racheting it down over time. Polluters can buy and sell credits, creating a financial incentive to adopt cleaner technologies.

The system will be developed jointly with a regional coalition known as the Western Climate Initiative. Some initial emission credits are likely to be sold, not given, to polluters. And ARB plans to limit the use of offsets, a way to “reduce” emissions by funding green projects.

It’s unclear what the costs of implementing the plan will be. The ARB will release details later, but claims it will bring an added 1 percent gross domestic product by 2020. California soaked up $1 billion of clean technology investment in 2006, they note.

But others point out the impact of higher fuel prices and job losses in the regulated industries. “I’m skeptical about an end result of economic gains,” says Dr. Kolstad, adding that how the plan affects “average Californians in their pocketbook” will be “the barometer of acceptance of it.”

Some early criticism came from industry groups. “It’s the largest regulatory program I have ever been involved in in 15 years,” says Cathy Reheis-Boyd, chief operating officer for the Western States Petroleum Association. She emphasizes that her industry supports the reduction goals but says cap-and-trade is the cheapest way to get there.